Madrid house prices hit new highs in 2025, rising over 16% year-on-year. Discover the latest trends, key price hotspots, and affordability insights in Madrid and its metropolitan area.
Madrid House Prices Rising Fast: 2025 Real Estate Market Sees Continued Growth and Affordability Challenges
The real estate market in Madrid is breaking new ground in 2025, with residential property prices accelerating rapidly both in the capital and across its metropolitan area. According to data from the latest Tinsa by Accumin Research Service analysis, the second quarter of 2025 has seen surging demand, upward price pressure, and ongoing concerns regarding house affordability, especially in central Madrid.
House Prices Soar in Madrid and Surrounding Municipalities
Residential property prices across the province of Madrid increased by an impressive +4.4% quarter-on-quarter and +16.1% year-on-year in Q2 2025. Even after adjusting for inflation, this translates to a 13.6% year-on-year growth, marking a clear intensification in the rate of price appreciation.
- Madrid Capital: In the city itself, prices surged by +3.9% quarter-on-quarter and +16.1% year-on-year (+13.6% in real terms). This sharp increase is the primary driver of the province’s overall housing price growth.
- Metropolitan Area: In the 16 main municipalities (excluding the capital), quarterly home price changes range from +1.9% to +4.9%, with annual changes between +4.5% and +11.2% (+2.3% to +8.8% after inflation).
Municipalities with the highest year-on-year growth rates include Móstoles, Pozuelo de Alarcón, Torrejón de Ardoz, and Coslada, surpassing 10% in nominal and 8% in real terms.
Madrid Province House Prices: By Municipality
- Madrid Capital: €4,457/m² (the highest)
- Pozuelo de Alarcón: €4,228/m²
- Western and Northern Municipalities: €4,300–€3,200/m²
- Eastern and Southern Municipalities: €1,800–€2,900/m²
- Parla: €1,851/m²
All regions are seeing price acceleration, with higher property values in the west and north, and comparatively lower prices in the east and south.
New All-Time Highs Surpass Previous Real Estate Bubble
Madrid province’s house prices now exceed the 2008 property bubble peak by 6.8% in nominal terms:
- Madrid Capital: +10.4% above bubble peak
- Las Rozas: +7.6%
- Majadahonda, Alcobendas: +4.4%
- Rivas Vaciamadrid: +1.2%
However, when accounting for inflation, current prices are still below those maximum values.
Affordability Remains a Challenge in Central Madrid
Access to homeownership is largely reasonable in most metropolitan municipalities, averaging at 35% of disposable household income. Exceptions include:
- Alcorcón, Leganés: 37%
- Coslada, Móstoles: 36%
However, Madrid city stands out: households must allocate 55% of their disposable income to mortgage payments, far above the critical threshold of 45%. This highlights growing affordability concerns for homebuyers in the capital.
Outlook for 2025: What’s Next for Madrid’s Housing Market?
With every municipality studied showing positive price growth and the capital city exerting the strongest upward pressure, Madrid’s real estate market shows no signs of slowing down. The ongoing challenge for buyers is not only to find housing but also to secure financing as the gap between income and property prices widens in the capital.
Madrid remains the epicenter of Spain’s housing price surge in 2025, with both the city and its surrounding municipalities experiencing record price increases. While many towns remain within reasonable affordability levels, the capital’s residents face growing financial strain. Keeping abreast of local price trends and affordability will be key for buyers, investors, and policy-makers in Spain’s dynamic real estate market.
